When internet commerce first came on the scene, companies were
jumping on the bandwagon and creating Web sites with an "if
you build it, they will come" attitude. Many businesses found
out the hard way that hanging out a shingle on the Internet
doesn't guarantee visitors, let alone sales. All you have to do
is witness the death of major Internet malls like IBM's World
Avenue to realize the Internet commerce business model is still a
work in progress.

"There have been extremely high expectations of Internet
commerce that have lessened considerably," says Michael
Sullivan-Trainor, program director of Internet research with
IDC/Link, an information technology research firm in Framingham,
Massachusetts.

Entrepreneurs who are succeeding in the world of Web commerce
are those who have developed new business models or services
particularly suited to the Internet. For example, Amazon.com offers
consumers a channel to buy hard-to-find books, while Auto-By-Tel
connects automobile buyers and sellers online. Retailers like
Lands' End and Wal-Mart and technology companies like Dell
Computer have been able to reach consumers who are ready and
willing to shop online. Internet commerce that connects companies
with regular suppliers or customers to encourage business
transactions and sales electronically is where experts predict much
of the future growth will come from.

Although business models are continuing to develop (and fail)
for online ventures, it's still a good idea to take a look at
Internet commerce opportunities for your business. Online commerce
provides a new avenue for sales, broadens your customer base and
opens a whole world of opportunities. However, in today's
changing online business environment, it takes a thorough
understanding of your target audience, knowledge of both
traditional and Internet marketing techniques, and a little finesse
to compete.

Built To Last

Building an online commerce site is a complex undertaking, and
creating and managing one requires technical know-how and careful
analysis of your business's resources. Generally, there are
three ways you can establish an Internet commerce presence: Use a
turnkey firm, an Internet service provider (ISP) or do it all
yourself.

Some Internet marketing and retailing companies specialize in
creating all-encompassing online commerce sites. Most offer a
comprehensive solution that includes everything from analysis of
your target market and design of your site to the actual site
development, implementation of electronic payment processing, and
overall site management. Most are very professional and take the
dirty work out of your hands, but they generally cost thousands of
dollars.

One company that specializes in the creation and management of
Web commerce sites is Digital Boardwalk (http://www.digitalboardwalk.com
). It will build your site and provide a variety of services to
help with promotions for your online store. Digital Boardwalk will
even fulfill the orders for you (if you ship them your product) so
you're never involved in daily operations.

Yet for many small businesses, turning to an ISP is probably the
most practical solution. Some ISPs handle the design, order and
payment processing issues. However, if you already have a Web site
and just want to add commerce services or if you have the technical
know-how to design the site yourself, ISPs can provide value-added
services such as ordering and credit-card processing.

Keep in mind, few ISPs specialize in extensive commerce
services, so consider your needs carefully before selecting a
company, advises Sullivan-Trainor. Ask about the reliability of the
ISP's hosting services and what kind of security methods are
used for processing payments. Also be sure to check out other sites
the ISP has built. Besides just being able to post an online
catalog, it should have the marketing and technical savvy to draw
customers to your site and keep them there so they'll buy again
and again.

If it's business-to-business commerce you're interested
in, choose an ISP specializing in the development of secure and
reliable "extranets." Extranets connect companies'
Web sites (and aren't accessible by the general public), so
business transactions with partners and suppliers can be conducted
online. A good way to find ISPs with the most suitable online
commerce services is to check out the buyer's guide of ISPs at
http://www.thelist.com

If you or your employees have the technical expertise, you can
build and host a commerce site yourself. But before you do,
cautions Sullivan-Trainor, become knowledgeable about custom
programming, standard commerce and security issues, and third-party
hardware and software vendors.

Web commerce development and management programs aimed at small
businesses have hit the market recently. Tools range from templates
that design online catalogs and software that performs sales
reporting and inventory management to more advanced programs that
integrate customer databases with your inventory data to display
personalized promotions targeted to your site visitors'
purchasing habits. The cost of these programs ranges from a few
hundred dollars to several thousand, depending on how advanced
their capabilities are.

A more entry-level application is Internet Business Breakthrough
($249) from Breakthrough Software. It has 50 easy-to-use,
pre-designed templates to create, organize and publish an online
store. Order forms and processing features to take orders
electronically are included; you can also publish your site on the
Internet with the click of a mouse button if you use one of the
authorized ISPs that Breakthrough Software partners with.

IBM has a popular program called Net.Commerce for more advanced
business-to-business and retail-oriented sites. Flexible design
templates, "Shopping Carts" to take electronic orders and
Address Books to indicate where a product should be shipped are
included. There are also features to help you build a customer
registration process complete with user passwords, import product
databases and manage your inventory. Net.Commerce can be used with
the Netscape Enterprise Server or IBM's Internet Connection
Secure Server (included); the price begins at $4,995 per
server.

Safety Net

With consumers still wary of buying online, there's a
movement underway to improve security. "Security is a
[concern] that everyone on the Internet shares," says Rebecca
Duncan, senior analyst of information security with Datapro
Information Services Group, an information technology research and
analysis firm in Delran, New Jersey. "We're seeing a lot
more interest from commercial vendors to work with security
vendors."

Encryption systems are one way to make online transactions more
secure. While the concept is quite technical, here's a basic
explanation of how it works: Encryption software takes text (such
as an order with a credit card number) and scrambles it. Then,
"public" and "private" keys are used to encode
and decode the message. The public key can be distributed and is
used to encrypt messages. The owner's private key is closely
held on his or her computer, and only when put together with the
message encoded with the public key will the message revert to
clear text (without the private key, the public key is useless for
translating the message).

Furthermore, there are "digital certificates" and
"digital signatures." Digital certificates are endorsed
by a third-party that guarantees certain information in the message
is accurate. Digital signatures confirm that the message was sent
by the authorized user and wasn't tampered with en route.

Systems that include these features are complicated to design,
so entrepreneurs need to work closely with security vendors to set
up the process, Duncan says. VeriSign (http://www.verisign.com ) and GTE
CyberTrust (http://www.cybertrust.com ) are two
leading companies that offer such security products.

There are a lot of things to consider when building an Internet
commerce site. Those who decide to jump in would do best to keep on
top of the latest technology advancements and keep in mind that
with a little work, a mountain of sales may be just around the
corner.